Hovis targets debts by closing Wigan rolls line

07 May, 2010

Page 4

Hovis is to make at least 115 workers redundant as it attempts to reduce its debts.

Owner Premier Foods will close the rolls line at its bakery at Aspull in Wigan later this month, resulting in more than 90 job losses, while 25 staff lost their jobs when the Martland Mill distribution depot recently closed.

As reported in British Baker (26 February, pg 5) Premier Foods was forced to review its morning goods business earlier this year, following rumours that it had lost a large crumpet contract. Bakers Food & Allied Workers Union organising regional secretary, Ian Hodson, blamed the supermarkets for the problem. "We all want cheap food but we want it provided by skilled workers," he said. "In their search for cheaper contracts, the retai-lers should consider what their actions are doing."

Hodson said he was disappointed with the way Premier had handled the redundancies and the fact staff were being encouraged to sign compromise agreements. "Some of them may not sign and could decide to go to an employment tribunal instead."

The closures will cost Premier Foods £4m, but will go some way to reducing its debts by £100m this year, said the company.

It follows the announcement of buoyant figures in its interim management statement, showing Q1 value growth for Hovis of 4.7% and volume growth of 8.5%, with market share up 0.5% to 25.6%. Total branded sales increased by 1.6% in the quarter. More promotional activity from its competitors was expected to result in lower market share in Q2, said Premier. However, it was confident that its own marketing and promotional initiatives would return Hovis to share growth in the second half of the year.

Premier chief executive Robert Schofield said: "Assuming no adverse change in the trading environment, we expect the benefits of our strategy to result in further progress in 2010."